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sr1977

sr1977
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  • Fiscal cliff? How about this cliff, says Howard Penney, charting gasoline prices over the last 5 years. The price at the pump today is higher than it was on this date in any of the years from 2008-2011. [View news story]
    Maybe it will finish the year like 2008 did...hope springs eternal.
    Sep 28 07:46 PM | Likes Like |Link to Comment
  • What might the troubles of "Sock City" - the Chinese boom town of Datang which last year produced about two pairs of socks for every person on earth - say about the rest of the economy? May's collapse of Anli Sock Group - which made 60M pairs annually - may prove to be "the Lehman Brothers of Datang," according to one government economist. "I'm very worried," says a surviving producer. "This year is much worse than 2008-09." [View news story]
    Good lord the sock bubble is collapsing...quick, everyone start buying the inverse sock index fund...and flip-flop puts!
    Sep 9 10:12 AM | 14 Likes Like |Link to Comment
  • Now's the time to end the mortgage interest deduction, Amity Shlaes argues; the housing industry's old canard about such a move destroying the market doesn't hold much water - we're already there. People actually "might well invest more in houses than we imagine if, for once, they know what those houses are really worth." [View news story]
    We already had the chance to see what "houses are really worth" and none of the sellers or Bankers wanted anything to do with it. How would eliminating the mortgage interest deduction (and theoretically lopping 10-15% off the value of a house) change that? The Answer is, it wouldn't. They would just redouble their efforts to keep inventory off the market and in the end we would wind up where we are today.
    Sep 1 09:39 AM | Likes Like |Link to Comment
  • The SEC was already looking into Knight Capital's (KCG) risk management procedures at the time of it's now infamous trading debacle, says Fox News' Charlie Gasparino. This adds a new twist to the story, says Gasparino, because at the time, SEC officials were conducting what is known as a “sweep” to determine if the firm was in compliance with its new "Market Access" rule. If they had been, it could have prevented the trading glitch. At a minimum, it's possible that the agency might have pointed out the firm's shortcomings before the trading error occurred. [View news story]
    Right you are: The test code got uploaded with the new software and the two started trading against each other. No word yet on whether the resulting melt-down validated the new software's trading ability or not...
    Aug 16 06:07 AM | Likes Like |Link to Comment
  • Authorities are unlikely to file criminal charges against Jon Corzine and other top MF Global execs after concluding that weak risk controls and chaos rather than fraud led to the disappearance of around $1B in customer money, the NYT reports. Regulators are still mulling civil action, while Corzine & Co. also face client lawsuits, which bankruptcy trustee James Giddens has agreed to co-operate with[View news story]
    "Chaos and porous risk controls at the firm"...are a symptom of fraud.
    Aug 16 05:40 AM | 6 Likes Like |Link to Comment
  • The USPS posted a $5.2B loss in Q3, up 70% from the amount it bled last year. Despite a looming operational default, politicians don't appear to want to touch the issue in fear of cutting jobs in front of local elections. (Previous: Who loses if the USPS defaults[View news story]
    To that end they are kind of like our banking institutions: They are expected to operate as a private profitable enterprise, but they are back-stopped by the Government when they can't or don't. Which doesn't give them much incentive to pay their own way does it?

    Moral Hazard, same as the banks.

    I agree we should "admit that operating a postal service requires government subsidies to serve all areas of the country and earmark the funds necessary to make that happen". My only concern would be how much more the Postal Service would cost under that scenario.
    Aug 10 04:55 AM | Likes Like |Link to Comment
  • Post-Derecho Lessons For Utility Investors [View article]
    This may not be an investment comment, but is perhaps more of a sentiment comment from a residential customers perspective. My dad, a retired civil servant 75 years old living in CT just spent over $7K to have a large generator and a 1000 gallon propane tank installed in his home. This decision was based primarily on having no electricity for over 3 weeks from the destructive New England winter storm you mentioned in your article. There were also some other storms in the recent past winters that have resulted in what customers perceived as excessively long power outages. People in New England expect some outages in the winter due to the preponderance of tree lined streets and above ground power lines. Many have wood stoves or fireplaces to deal with these normally short power outages. However, outages lasting 1-3 weeks are definitely not expected and having to install expensive generators in these tough economic times leads to a pissed off constituency. Between perceived long response times from the Big electric companies, fluctuating gasoline prices from Big oil and poor economic conditions perceived to be caused by wall street, banks and politicians, my dad says that if he was younger he would move to Canada. I don't know if conditions in Canada are any better or not, but I think you can understand where he is coming from.

    BTW, thanks for the interesting & well written article.
    Aug 3 03:52 PM | 1 Like Like |Link to Comment
  • Draghi: European shares and the euro stage a big reversal as the ECB chief is talking a tough game, but the fact that he's announcing no new plan suggests he doesn't have the support (Germans) to undertake anything concrete yet. The euro - previously on a tear - literally has the floor taken out from underneath. Stoxx 50 now in the red.  [View news story]
    Merkel says the road to euro bonds should be paved with gold bricks not cheap talk...
    Aug 2 08:52 AM | Likes Like |Link to Comment
  • Draghi: Rumors of the demise of the euro are unacceptable, high government bond yields are unacceptable. ... the euro is irreversible.  [View news story]
    Rumors of the demise of the rumors are unacceptable and must be reversed...
    Aug 2 08:44 AM | Likes Like |Link to Comment
  • London could be overtaking New York in importance for global oil trading, with volume of North Sea Brent crude exceeding that of WTI on NYMEX for the first time ever in Q2. Brent responds more to global geopolitics such as in the Middle East and North Africa, says ETF Securities' Martin Arnold, while U.S. grade reflects domestic factors more.  [View news story]
    The USA might be the largest single consumer of oil, but it's consumption is not larger than the combined markets served by Brent. Brent tends to have a larger risk premium and is the preferred oil contract in the fast growing SE Asia area as well.

    The distribution issues you speak of apply more to WTI than Brent, as much of WTI is land-locked and can't be shipped internationally. This also leads to a glut of oil in Cushing when the USA economy is soft and demand is down, suppressing the price of WTI over Brent.
    Aug 2 06:45 AM | Likes Like |Link to Comment
  • Knight Capital (KCG -10%) plunges on word of technical issues with a trading algorithm. The NYSE apparently halted (then resumed) trading in a number of stocks swung around by the issue. Among those reportedly affected was Berkshire Hathaway (BRK.B).  [View news story]
    This comes literaly seconds after $4 billion in Algo SPY trades were executed 3 seconds before the close yesterday (per NANEX).

    Markets jumpy ahead of the Fed or perhaps someone has some inside info.
    Aug 1 10:47 AM | Likes Like |Link to Comment
  • More on the ADP report: "The gain in private employment is strong enough to suggest that the national unemployment rate may have declined in July," says Joel Prakken. "If reinforced by a similar reading (NFP on Friday), it will alleviate concerns that the economy has slipped into a downturn." "If" is the operative word, as the ADP has generally strongly overestimated the NFP print recently.  [View news story]
    ADP has over-estimated by an average of 55K per month over the last 4 months.
    Aug 1 08:46 AM | 1 Like Like |Link to Comment
  • MF Global Holdings' brokerage clients will eventually get their money back, predicts Louis Freeh, the trustee carrying out the parent company's liquidation. Freeh made the forecast about the $1.6B that went missing in written testimony for a Senate hearing that is scheduled for today.  [View news story]
    In related news, The trustee liquidating Peregrine Financial Group Inc. asked a judge for authority to subpoena the defunct futures brokerage’s banks including JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) for information about transfers from segregated accounts and proprietary accounts.

    http://bloom.bg/OmHRoe
    Aug 1 04:42 AM | Likes Like |Link to Comment
  • Despite Cobalt Energy's (CIE) widening Q2 loss on a large charge related to some of its Gulf of Mexico well projects, shares +13.5% premarket on encouraging news that its Cameia No. 2 appraisal well offshore Angola has tapped a large hydrocarbon accumulation, discovering oil deposits deeper than those found in Cameia No. 1.  [View news story]
    Is anyone surprised by this?
    Jul 31 09:26 AM | Likes Like |Link to Comment
  • ICSC Retail Store Sales: -1.7% W/W, vs. +1.0% last week. +1.8% Y/Y, vs. +3.3% last week.  [View news story]
    My impression in my part of the world (S.FL) is that large numbers of whats left of the middle class & upper lower class are on the cusp of going completely broke. These would be the "savers" who were probably mostly prudent financially prior to 2008 and had socked away cash for a rainy day. For them, from the fall of 2008 to now has been one long rainy day and their resources are nearly depleted. Many of these people have underwater homes that they are current on the payments with, but can't continue the game much longer. With housing prices having popped 10% YOY in S.FL & demand up due to lack of distressed RE they appear to be trying sell on the weekends - "For Sale by Owner" signs pop up like magic all over town on the weekends and buyer traffic looks so-so to OK.

    Most businesses in these low to middle income area's appear to be dieing slow deaths and strip mall vacancies are high.

    I suspect that if anyone did an analysis of the ratio of checking account balances approaching zero to those that are not and the ratio of checking account balances that more money is being drawn out of than is being put into than those that are not...and compare those to the same ratio's going back 5 years...that you would most likely uncover some sobering statistics.
    Jul 31 09:09 AM | 1 Like Like |Link to Comment
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